Loan Default and Car Repossession
Car loan payments might seem manageable when they begin. Still, unexpected expenses such as having a baby or major home repairs can quickly exceed budgetary restrictions and lead to missed payments and, ultimately, loan default. Most states allow lenders to repossess vehicles when payments have not been received on time, selling them and applying the proceeds toward any outstanding or deficiency balance on a loan agreement. But, in other circumstances, you must know about loan defaults and car repossession.
What Happens When You Default On A Car Loan
Some lenders can repossess your vehicle after only one missed monthly payment, depending on state laws and the terms of your loan agreement. Once repossessed, lenders typically auction it to recover costs; if this sale doesn’t cover your entire loan balance, then any deficiency balance could still exist and require payment to be covered. If you have difficulty meeting your loan payments, contact your lender immediately.
Most will work with you to restructure the repayment plan or reduce late fees and interest charges as quickly as possible. The Pope Firm may help you strategize how best to address multiple debts. Debt settlement solutions could allow you to reallocate budget items and catch up on payments to prevent default on car loans or credit lines. Whether you live in Johnson City, TN or elsewhere, we have you covered!